What Health Insurance Plan Should I Choose?
The Money Class You Never Got in School
Why This Stuff Feels So Confusing
If you’ve ever stared at your company’s benefits packet thinking “What does any of this mean?”, you’re not alone. Most of us were never taught how to read insurance plans, let alone choose the right one.
But choosing well can save you thousands—and set you up with coverage that actually works when you need it.
Key Health Insurance Terms (Made Simple)
- Deductible: The amount you pay out of pocket before your insurance starts to cover things.
- Premium: What you pay each month just to have coverage, whether you use it or not.
- Copay: A flat fee you pay when you go to the doctor, like $25 for a visit.
- Coinsurance: After you hit your deductible, you still split costs. Example: insurance pays 80%, you pay 20%.
- In-Network: Doctors your insurance works with. You’ll pay less if you stick with them.
- Out-of-Network: Doctors not contracted with your plan. Much more expensive.
- Individual vs. Family: Individual = coverage for just you. Family = you + dependents/spouse.
- Out-of-Pocket Max: The most you’ll pay in a year, no matter what happens.
Comparing 3 Real-World Health Plans
Let’s say your employer offers three plans. Here's a breakdown:
| Plan | Monthly Premium | Deductible | Copay (PCP/Specialist) | Out-of-Pocket Max | Best For |
|---|---|---|---|---|---|
| Basic HMO | $85 | $1,000 | $25 / $40 | $3,500 | Low usage, stays in-network |
| PPO Plus | $160 | $500 | $20 / $35 | $2,500 | Flexibility, out-of-network options |
| HDHP + HSA | $50 | $3,000 | 20% after deductible | $6,000 | Young, healthy, saving for future |
How Cost-Sharing Really Works
Here’s what you’d pay out of pocket for a $4,000 medical bill under each plan (before hitting the out-of-pocket max):
Premiums are lower with an HDHP, but if something happens, your costs are higher. Plans like PPOs cost more upfront but offer easier access to care and lower bills in an emergency.
Which Plan Should You Pick?
- Pick Basic HMO if you don’t see the doctor much, want a low premium, and don’t mind staying in-network.
- Pick PPO Plus if you want flexibility, see specialists, or might need out-of-network coverage.
- Pick HDHP + HSA if you're healthy, want to save on taxes, and can afford higher bills in exchange for lower premiums.
Final Questions to Ask
- What’s the total annual cost (monthly premium × 12 + deductible)?
- Does this plan include mental health, dental, or vision?
- Can I use this plan while traveling or living in a different state?
- Will I hit my deductible just from regular prescriptions or appointments?
Make Your Plan Work For You
Choosing the right plan doesn’t mean you’ll use every feature. But when life happens (and it will), you’ll be glad you chose the one that fits your needs—and your budget.
Once your paycheck starts rolling in, make sure you’re budgeting for premiums, deductibles, and savings all in one place. Use YNAB (You Need a Budget) to keep it all clear and stress-free.
Try YNAB free with my link here
You’re in MoneyMode now. Health insurance isn’t the fun part of adulthood—but it’s one of the most important. And now, you know how to choose wisely.
